Qualified Exchange Accomodation Agreement

EXHIBIT 10.2


QUALIFIED EXCHANGE ACCOMMODATION AGREEMENT


THIS AGREEMENT (this "Agreement" or "Exchange Agreement") is entered into by and between Green 1412 Broadway LLC, a New York limited liability company, hereinafter referred to as either "Exchanger" or "Taxpayer", and BEC 317 LLC, a Delaware limited liability company, having its principal place of business in Richmond, Virginia, hereinafter referred to as "BEC 317."


RECITALS:


WHEREAS, Exchanger owns certain real property, hereinafter referred to as the "Relinquished Property," which is legally described in Exhibit "A" attached hereto; and


WHEREAS, Exchanger desires to exchange the Relinquished Property only for like-kind property, hereinafter referred to as the "Replacement Property," in a transaction that will qualify for tax-deferred treatment under Section 1031 of the Internal Revenue Code of 1986, as amended (the "Code"); and


WHEREAS, Exchanger has found suitable property for accomplishing said tax-deferred exchange, as legally described in Exhibit "B" attached hereto, hereinafter referred to as the "Replacement Property," but has not sold the Relinquished Property; and


WHEREAS, BEC 317 owns 100% of the limited liability membership interests (the "LLC Interests") in Green 317 Madison LLC ("Green 317"); and


WHEREAS, Green 317 has entered into a Sale-Purchase Agreement dated the date hereof with Richfield Investment Company ("Seller") for the purchase


of the Replacement Property (the "Replacement Property Agreement"), which Replacement Property Agreement is attached hereto as Exhibit "C";


WHEREAS, Exchanger, with a continued intent to complete a tax-deferred exchange pursuant to Section 1031 of the Code, is willing, directly or through a related entity, to acquire all of the benefits and burdens of the Replacement Property on the terms and conditions hereof; and


WHEREAS, BEC 317 is willing to hold title to the LLC Interests (and thereby hold title to the Replacement Property through Green 317) for the benefit of Exchanger in order to facilitate an exchange under Section 1031 of the Code and in accordance with the safe harbor established by Revenue Procedure 2000-37 and according to the terms and conditions as set forth herein.


WHEREAS, Exchanger has entered into a Sale-Purchase Agreement (the "Relinquished Property Agreement") dated April 24, 2001 between Exchanger, as Seller, and JER 1412 Broadway, LLC ("JER"), as Purchaser, to sell the Relinquished Property to JER on a date after the date hereof; and


WHEREAS, upon the sale of the Relinquished Property, Exchanger intends to purchase, and BEC 317 intends to sell, the LLC Interests to complete the aforesaid tax-deferred exchange.


NOW THEREFORE, the parties hereto agree as follows:


1. The foregoing Recitals are incorporated herein by this reference. Exchanger shall acquire the Replacement Property in accordance with the terms of the Replacement Property Agreement.


2


2. The funds necessary to close on the purchase of the Replacement Property (the "Proceeds") shall be advanced to BEC 317 by SL Green Realty Corp. ("SL Green"), and BEC 317 shall deliver to SL Green a promissory note for said sum (the "Note"). The Note shall be due and payable upon the closing of the sale of the Relinquished Property, but in no event later than 180 days after the closing of the Replacement Property (the "Termination Date"). The Note shall be non-recourse and shall bear interest at 5% per annum. The Note shall be secured by an agreement (the "Pledge Agreement") executed by BEC 317 pledging the LLC Interests. BEC 317 shall contribute the Proceeds to Green 317, provided, however, SL Green, at its option, may deliver the Proceeds directly to Green 317. A copy of the Note and the Pledge Agreement are attached hereto as Exhibit "D" and Exhibit "E," respectively. The Note shall provide that it may be satisfied from the net sale proceeds of the Relinquished Property or as otherwise provided in Paragraph 11 hereof. It is hereby understood and agreed that the receipt of the net sale proceeds of the Relinquished Property shall be used to satisfy the Note and fully discharge BEC 317 from all liabilities under the Note; provided, however, BEC 317 agrees to deliver to the holder of the Note all other funds loaned to it and not used to either acquire the Replacement Property or as otherwise approved by the Exchanger as well as all funds received by BEC 317 from the net sale proceeds of the Relinquished Property and to execute, acknowledge, deliver, transfer and convey, without warranty (except for its own actions), all bills of sale, assignment of leases and other documentation reasonably requested by the Exchanger. In addition, at Exchanger's election, BEC 317 shall either deliver a bargain and sale deed to Exchanger for the Replacement Property or execute an assignment of 100% of the LLC Interests to Exchanger, and Building Exchange Company, a Virginia corporation, shall execute an assignment of 100% of the


3


limited liability company interest in BEC 317 to Exchanger. At that time, Exchanger shall execute and deliver to BEC 317 an agreement terminating the Pledge Agreement.


3. Identification of Relinquished Property.


(a) On or before midnight of the date that is forty-five (45) days after the date of the acquisition of the Replacement Property (in the event there is more than one Replacement Property, forty-five (45) days after the acquisition of the first Replacement Property) by BEC 317 (the "Identification Period"), Taxpayer shall identify the Relinquished Property to be transferred by Taxpayer in exchange for the Replacement Property. Such identification shall be effectuated by one or more Notices of Identification signed by Taxpayer or on behalf of Taxpayer. Notices of Identification shall be hand delivered, mailed (certified, return receipt requested), or sent by facsimile to BEC 317 before the end of the Identification Period. Taxpayer shall give BEC 317 prompt written notice of any changes, deletions, or additions and may revoke a Notice of Identification only by a written notice (a "Notice of Revocation") signed by the Taxpayer and hand delivered, mailed (certified, return receipt requested), or sent by facsimile to BEC 317 before the end of the Identification Period. To be effective, a Notice of Identification sent to BEC 317 by facsimile must be sent to the facsimile number which is part of BEC 317's notice address below.


(b) Taxpayer agrees that the Relinquished Property shall be identified on the Notice of Identification in accordance with the following principles:


(i) Taxpayer shall unambiguously describe the Relinquished Property using either its complete legal description, complete street address, Assessor's Parcel Number, or distinguishable name.


4


(ii) Taxpayer shall identify only that number of Relinquished Properties which meets one of the following "rules": (x) three (3) properties without regard to the fair market value of the properties; (y) any number of properties so long as their aggregate fair market value as of the end of the Identification Period does not exceed two hundred percent (200%) of the aggregate fair market value of the Replacement Property as of the date such Replacement Property was acquired by BEC 317; or (z) any number of properties without regard to their fair market value so long as Taxpayer transfers identified Relinquished Properties constituting at least ninety-five percent (95%) of the aggregate fair market value of ...